Knicherdoodles, Inc. 20X1 20X2 Industry averages ratios (360 day year) 20X1 20X2 Sales (all credit) $740 $785 Current ratio 4.1 ? ? COGS 430 440 Quick ratio 2.1 ? ? Operating Exp (Excluding Depreciation) 150 160 A/R collection period 47 ? ? Interest 33 35 Inventory turnover 2.1 ? 2 Dividends 16 17 Total asset turnover 0.35 ? ? Depreciation Expense 100 110 Fixed asset turnover 0.45 ? ? Cash 70 75 Gross margin 41.20% ? ? Accounts receivables 563 502 Operating margin 11.10% ? ? Accounts payable 390 405 Times interest earned 4.3x ? ? Inventory 662 640 Long-term debt 340 410 Net fixed assets 1,680 1,413 Total Assets 2,960 2,983 Common stock 700 235 Tax rate 35% 35% An analyst's report concludes that "Even though Knickerdoodle's management is good at controlling operating cost, profitab of industry norms because the firm's production costs are simply too high." Do you agree with this statement? Why or why nc Yes, operating costs are OK but production costs are too high ory 662 640 erm debt 340 410 ed assets 1,680 1,413 -ssets 2,960 2,983 on stock 700 235 e 35% 35% myst's report concludes that "Even though Knickerdoodle's management is good at controlling operating cost, profitability falls short kry norms because the firm's production costs are simply too high." Do you agree with this statement? Why or why not? Yes, operating costs are OK but production costs are too high No, production cost and operating costs are too high No, Production cost and operating costs are about right No, Production costs are OK but the operating costs are too high